Toyota and Lexus has questioned the merits of a CO2-based company car tax regime when a new emissions test is introduced. Instead, the manufacturer believes there should be an increased focus on mono-nitrogen oxides (NOx).
A new vehicle emissions test, which could be introduced from 2017, would provide a more realistic picture of fuel consumption that the existing New European Driving Cycle (NEDC) has failed to deliver.
However, fuel efficiency figures that better reflect real-world driving conditions will also result in an increase in the reported CO2 emissions.
That could temporarily create a two-tier vehicle tax system, with employers paying significantly more in Class 1A NIC and VED, and employees forced into a much higher benefit-in-kind (BIK) tax bracket.
Neil Broad, general manager of Toyota and Lexus Fleet Services, believes air quality concerns and the new emissions test will force the Government to move away from a CO2-based taxation system.
He said: “You can’t have a tax regime based on a flawed measurement, but then introduce another which screws up everything we’ve already got.”
Toyota and Lexus Fleet Services has been calling on fleets to switch from diesel to petrol-electric hybrids following the announcement that the European Commission has launched legal proceedings against the UK for failing to deal with air pollution.
It is estimated that harmful exhaust emissions are responsible for 5,000 premature deaths each year in the UK.
The Commission says that levels of nitrogen dioxide, mainly from diesel engines, are excessive in many British cities and the gas can lead to major respiratory illnesses and premature deaths.
Britain was meant to meet EU limits by 2010, but the Government admits that London won’t achieve this standard until 2025.
“It’s starting to become serious,” Broad said. “The market still exists for diesel cars and diesel cars are still very good motorway cruisers. That’s why there will be a fleet market for diesels for the foreseeable future.
“However, we believe the future shouldn’t be diesel because of the compromises you have to make.”
Petrol hybrid emissions contain no particulates, virtually no NOx and much reduced levels of CO2, while drivers can enjoy lower BIK liability than diesel drivers and employers gain from reduced Class 1 National Insurance contributions.
Toyota Lexus has just gone past the 100,000 petrol hybrid sales mark in the UK and achieved 6.5 million sales globally.
Broad said: “It isn’t just about CO2; CO2 is important but what we’re trying to say is you can get that low CO2 and also cut the rest of it out.”
Robert Goodwill, under secretary of state for transport, has previously told Fleet News that vehicle taxation based on CO2 emissions was here to stay for the foreseeable future.
“There are currently no plans to change the underlying structure of car tax legislation,” he said.
Instead, growing concerns at the ‘dieselisation’ of the UK car parc could be tackled by ultra-low emission zones being introduced across the country.
London plans to have the world’s first ultra-low emission zone in place by 2020 and the key entry requirement is expected to be linked to the new Euro 6 emissions standard, which more than halves the amount of NOx a diesel car can emit, with a cap of 80mg/km.
Euro 6 becomes mandatory for new cars and vans launched from September, while compliant cars and light commercial vehicles are already available from some manufacturers.
Broad added: “Although they have some benefits, diesel-engined vehicles are a major source of harmful pollution – despite using catalytic converters and filters, which are expensive to buy and service.
“The right choice is a vehicle that minimises damage to lives, health and the environment.
“Thankfully, in the case of petrol hybrids, that choice also makes complete economic sense.”